Question: Question 3 A CMO is created with one Floater and one Inverse Floater class. The CMO is backed by a mortgage pool of which, at

Question 3 A CMO is created with one Floater and one Inverse Floater class. The CMO is backed by a mortgage pool of which, at origination, the Floater class holds 45 million in principal and the Inverse Floater class holds 15 million in principal. At origination, the floater class has a coupon rate of 3% and the collateral's coupon rate (the miortgage pool's WAC) is 4.5%, what is the inverse floater's coupon rate at origination? Give your answer as a percentage A. 9.00% B. 8.25% C. 4.50% D. 3.00% E. 10.15%

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